The Nigerian National Petroleum Company (NNPC) Limited has suspended the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators. The decision, which took immediate effect, has left stakeholders in shock and disbelief.

The naira-for-crude arrangement, introduced on October 1, 2024, allowed local refiners to purchase crude oil in naira instead of dollars. The initiative aimed to support domestic refining capacity, reduce reliance on imported petroleum products, and stabilize the local currency by easing pressure on foreign exchange reserves.

However, with the termination of the agreement, Nigerian refineries, including the Dangote facility, will now have to source crude oil from international suppliers, paying in dollars instead of naira. This shift is expected to escalate operational costs, potentially leading to higher fuel prices at the pump.

According to sources, the NNPC informed local refiners that it has already committed its crude oil production to forward contracts, leaving no supply available for domestic refineries. This revelation comes despite reports that Nigeria’s crude output has increased since the deal first began.

Dangote Refinery and other private refiners, including Waltersmith Petroman and BUA Refinery, are also expected to feel the impact of the suspension. The deal had provided them with a cost-effective way to secure crude oil feedstock, enabling them to compete with international players.